Part I
Internal corporate or other entity investigations frequently generate discovery motions that focus on privilege and work product creation and waiver issues. Two recent decisions offer some good news for defendants resisting discovery of investigation-related documents.
In Wisk Aero LLC v. Archer Aviation Inc., Case No. 21-cv-02450-WHO (DMR), 2023 U.S. Dist. LEXIS 103780 (N.D. Cal. June 14, 2023), the court understandably held that defendant waived some work product protection by relying on its expert FTI Consulting's forensic investigation of alleged trade secret misappropriation and patent infringement. But the court properly held that defendant's "waiver extends to 'factual' work product concerning the same subject matter as the disclosed work product — FTI's investigation — but does not extend to opinion work product." Id. at *28-29. This generally accepted favorable waiver scope standard protects what in most cases the investigating corporation worries most about disclosing.
This absolute or nearly absolute protection for opinion work product adds to the litany of factors making work product more attractive in some cases than the attorney-client privilege. Part II will describe a favorable Texas Supreme Court investigation-related decision.
Part II
Part I described a federal court case holding that explicit reliance on a consultant's investigation waived fact work product protection related to the investigation — but not opinion work product protection.
About two weeks later, in University of Texas System v. Franklin Center for Government & Public Integrity, the Texas Supreme Court issued a very favorable investigation-related decision, finding that Kroll investigators were protected as a "lawyer's representative" because they acted under the direction of UT's General Counsel; Kroll's investigation into allegations of undue influence in the University's admissions process deserved privilege protection, as shown by affidavits "prepared after the fact, as are most affidavits prepared in the litigation context." No. 21-0534, 2023 Tex. LEXIS 627, at *25-26 (Tex. June 30, 2023). The Court then found that the publication of Kroll's report did not waive privilege as to "all the privilege-log documents" (as the lower court had ruled), but instead only triggered a subject matter waiver requiring production of: (1) internal UT privileged emails, but only to the extent that Kroll's published report "contains quotes or very specific paraphrases of the emails"; (2) Kroll’s interview notes, but only to the extent that the Kroll report "amounted to disclosure of a ‘significant part' of the [interview] communication." Id. at *6-7, *30, *33.
Lawyers arranging for internal corporate investigations should take heart in the federal court’s affirmation of continuing protection for opinion work product despite a waiver of fact work product protection. And the Texas Supreme Court's favorable investigation-related ruling may serve as a model for lawyers' investigation and later publications of the results.
Published October 9, 2023.
